U.S. Sanctions Iran’s New Strait of Hormuz Authority

The United States has imposed sanctions on Iran’s newly formed Persian Gulf Strait Authority (PGSA), an agency created to regulate and monetize transit through the Strait of Hormuz. The Treasury Department announced the sanctions on May 27, accusing the agency of enabling the Islamic Revolutionary Guard Corps (IRGC) to extort vessels passing through the critical waterway. The move is part of Operation Economic Fury, a broader U.S. campaign to pressure Iran’s economy.

Key Developments:

• The PGSA was established to vet and charge tolls for vessels transiting the Strait of Hormuz, a move Iran frames as asserting sovereignty over the waterway.
• The U.S. sanctions bar entities from paying tolls to the PGSA, cutting off financial access to the global banking system.

Context and Reactions:
U.S. Perspective:
Treasury Secretary Scott Bessent called the PGSA a "joke" and claimed the sanctions prove Iran’s desperation for revenue amid economic pressure. He stated that the U.S. has formed a "Wall of Steel" to choke Iran’s oil revenue, linking the sanctions to broader efforts to counter Iran’s military and nuclear ambitions.

Iran’s Stance:
Iran’s Revolutionary Guard has defended the PGSA, asserting that the designated corridor is the only safe route for transit. The agency’s creation follows Iran’s recent ballistic missile launch toward Kuwait, which U.S. Central Command intercepted, calling it a "ceasefire violation."

Broader Implications:
The sanctions coincide with rising tensions in the Strait of Hormuz, a critical route for global oil and gas shipments. The U.S. has also sanctioned Iranian airlines as part of its economic campaign. Meanwhile, President Donald Trump has dismissed pressure to negotiate with Iran before midterm elections, claiming the country’s economy is in "free fall."

Military Escalation:
The sanctions follow U.S. strikes on an Iranian military facility after Iranian drones were downed near the strait. The U.S. has framed these actions as necessary to push Iran toward a diplomatic resolution to the conflict.